The Endeavour Group Ltd (ASX: EDV) share price has taken a tumble on Wednesday.

In morning trade, the retail drinks company’s shares are down 5% to $6.36.

Why is the Endeavour share price falling?

The weakness in the Endeavour share price has been driven by news that major shareholder Woolworths Group Ltd (ASX: WOW) has partially sold down its holding.

According to the release, Woolworths has agreed to sell 5.5% of the issued capital of Endeavour via a block trade at a price of $6.46 per share. This is a 3.6% discount to where the Endeavour share price closed Tuesday’s session.

Endeavour notes that Woolworths retains a 9.1% stake and has no intention to sell any more shares in the short to medium term.

Furthermore, the two companies intend to continue to work closely together. It commented:

Endeavour will continue its close relationship with the Woolworths Group with a range of long-term partnership agreements in place. These include the provision of supply chain solutions through Primary Connect; a joint food and liquor offer through co-located BWS stores and online; payment services provided by WPay; and BWS a key partner of Everyday Rewards.

Broker reaction

Goldman Sachs has responded to the selldown. While it suspects that the news could weigh on the Endeavour share price in the near term, it has retained its buy rating. It said:

We expect the sell-down to generate short-term share price pressure and also comes at a time when retail growth (Dan’s and BWS) is likely to be muted given high prior year comps and the hotels business is challenged by regulatory tightening expectations.

That said, we expect underlying Xmas period trading to be strong, with the Hotels sales/property back to above pre-COVID levels and that implementation of tighter gaming regulations to ultimately be slower than market anticipation given highly fragmented market share with majority of ~7,500+ pubs in Australia are owned by independent publicans.

Goldman also spoke about the potential headwind from regulatory tightening in the industry. The good news is that its analysts believe the current Endeavour share price has factored in this risk, making now an opportune time to invest. It concludes:

Our sensitivity analysis suggests that assuming gaming is currently ~45% of hotel revenues and ~65% of hotel EBIT, a -10% impact to gaming revenue due to regulatory tightening could impact group EBIT by ~8% and if EV/EBIT multiple erodes from our current SOTP of 15x to 13x, we would derive a SOTP valuation of A$6.80/sh. As such, we view the latest price range of A$6.46-A$56/sh as already largely factoring in gaming regulation risk and is an attractive entry point to a high quality Australian retailer; remain Buy.

The post Why is the Endeavour share price sinking today? appeared first on The Motley Fool Australia.

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More reading

• Woolworths share price higher on Endeavour selldown: What’s going on?
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Woolworths share price lagging the ASX 200 on Monday?
• Goldman Sachs names 2 ASX 200 blue chip shares to buy
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Woolworths Group Ltd (ASX: WOW) share price is edging higher on Wednesday.

In morning trade, the retail giant’s shares are up 0.25% to $34.20.

Why is the Woolworths share price rising?

The Woolworths share price is rising today after the company announced the partial sell down of its stake in Endeavour Group Ltd (ASX: EDV).

According to the release, Woolworths has agreed to sell 5.5% of the issued capital of Endeavour via a block trade at a price of $6.46 per share.

This represents a 3.6% discount to where the Endeavour share price closed yesterday’s session.

Following the sale, Woolworths will retain a 9.1% interest in Endeavour. It advised that it has no current intention to undertake a further selldown in the short to medium term.

Woolworths’ CEO, Brad Banducci, revealed that the company was selling the stake to raise funds for strategic investments. He said:

Our decision to reduce our stake comes after a successful transition from ownership to partnership with Endeavour Group. The proceeds will be used for strategic investments and general corporate purposes.

Potential acquisitions

While nothing was announced today, the rumour on the street is that Woolworths plans to use these funds to acquire a stake of at least 50% in pet accessories and food retailer PETstock for $600 million.

Goldman Sachs commented on the potential acquisition, noting that “if true this would be in line with its eco-system growth strategy.”

The broker sees the transition from liquor and gaming to pet retail as a potentially smart move. It commented:

Strategically, the transition from liquor retail and gaming/hotels into pet retail is in line with its strategy of building a retail ecosystem. Additionally, with declining birth rates in Australia (1.70 in 2021 vs. 1.92 in 2011) resulting in relatively higher growth in the Petcare industry (~5% CAGR 2017-2022 to ~5% 2022-2027, Euromonitor) vs. alcohol retail (~7% CAGR 2017-2022 to 4% 2022-2027e, ABS Retail, GSe), the sector growth outlook appears attractive.

A PETstock acquisition would have the potential to generate synergies, bringing scale to WOW’s existing investment in ~58% of Pet Culture (independently operated online petcare retailer) and its vision to expand everyday care categories (via online marketplace and BigW).

Goldman also highlights that the petcare category has strong customer loyalty, which it feels bodes well for Woolworths which already has a loyal customer base using its Everyday Rewards program. It explained:

Our recent conversation with PETstock’s key industry player Greencross at our GS Digital Consumer conference showed that the petcare category is a highly loyal business (Greencross ~92% of sales from loyalty program members) with eco-system expansion opportunities (single category shopper ~A$100 spend per year vs. A$1,800 spend full eco-system shopper) and hence if the acquisition does materialize, it could serve as a growth lever to build a new sizeable growth platform for WOW.

The post Woolworths share price higher on Endeavour selldown: What’s going on? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why is the Woolworths share price lagging the ASX 200 on Monday?
• Goldman Sachs names 2 ASX 200 blue chip shares to buy
• 5 things to watch on the ASX 200 on Monday
• What’s impacting the Woolworths share price on Thursday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is full of ASX dividend shares that could be solid ideas to own for long-term passive dividend income.

Dividends can be a very effective and rewarding way for investors to benefit from the profits a business generates, without having to sell those shares.

For investors relying on dividend income, it’s the businesses with strong operations that could be the best ones to own for the years to come. I think these three are contenders.

Telstra Group Ltd (ASX: TLS)

Telstra is the leading ASX telco share, with the biggest market share and a number of additional businesses on top of its core mobile division. The company recently bought a telco called Digicel Pacific which services a number of Pacific island nations. It’s also growing a division called Telstra Health, which is there to help the healthcare sector and patients digitally.

The transition to the NBN was not a good time for the business or its profit. However, that has now finished and the business is expecting to grow its underlying earnings per share (EPS) at a compound annual growth rate (CAGR) in the “high-teens” to FY25.

This could enable a stable and growing dividend for the ASX 200 dividend share in the coming years, as it cuts costs, grows mobile fees in line with inflation and rolls out 5G. I think the outlook is looking good.

The FY22 final dividend was grown by 6.25% to 8.5 cents. An annual dividend of 17 cents per share in FY23 would translate into a grossed-up dividend yield of 6% at the current Telstra share price.

Macquarie Group Ltd (ASX: MQG)

I think that Macquarie is one of the leading global financial institutions. It has four different divisions – a banking and financial services (BFS) division, an investment banking segment called Macquarie Capital, an asset management division called Macquarie Asset Management and a division called commodities and global markets (CGM).

At different points of the economic cycle, each of these businesses can perform well and produce strong profits for the business.

Macquarie has a dividend payout ratio policy to pay between 50% to 70% to shareholders. In the FY23 first-half result, it paid an interim dividend of $3 per share, representing a dividend payout ratio of 50%. This came after half-year net profit grew by 13% to $2.3 billion.

This level of payout means there is plenty of profit to reinvest back into the ASX 200 dividend share for more long-term growth. I think that’s the right strategy.

The broker Morgan Stanley’s dividend estimate puts the FY23 grossed-up dividend yield at around 4.2% at the current Macquarie share price.

Coles Group Ltd (ASX: COL)

Coles is a leading supermarket business. I think Coles could be considered as a very defensive ASX share, though it’s unlikely to grow at a rapid pace either due to its size and the rate of population growth.

However, the ASX 200 dividend share is investing over $1 billion into automated warehouses which could improve efficiencies, stock flow and profit margins in the coming years.

The business is paying a relatively high dividend payout ratio, providing an attractive dividend yield, while still keeping some of the profit to invest in the business and open new supermarkets.

Morgans, a broker, thinks that Coles could pay a grossed-up dividend yield of 5.5% in FY23 at the current Coles share price.

The post 3 top dividend payers of the ASX 200 appeared first on The Motley Fool Australia.

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More reading

• Bought $1,000 of Telstra shares 10 years ago? Here’s how much dividend income you’ve received
• How much do I need to invest in ASX dividend shares for a retirement income of $5,000 per month?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• The Macquarie dividend is being divvied out today. Here’s the lowdown
• Morgans names 2 of the best ASX 200 dividend shares to buy in December

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The share price of Australia’s national telco Telstra Group Ltd (ASX: TLS) has struggled over the last decade. Fortunately for those invested in the stock, it’s paid out consistent dividends over that time.

If you had bought $1,000 of Telstra shares 10 years ago today, you likely would have snapped up 233 shares, paying $4.29 apiece.

Sadly, the Telstra share price has struggled since then.

The company’s stock is trading at $4.03 at the time of writing, 6.45% lower than it was in December 2012. That also leaves our figurative parcel with a value of around $938.99.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 57% over the last decade.

But could it be possible Telstra’s dividends have offset its share price’s poor performance? Let’s take a look.

How much have Telstra shares paid in dividends in 10 years?

Here are all the dividends offered by Telstra shares over the decade just been:

Telstra dividends’ pay date	Type	Dividend amount
September 2022	Final and special	7.5 cents and 1 cent
April 2022	Interim and special	6 cents and 2 cents
September 2021	Final and special	5 cents and 3 cents
March 2021	Interim and special	5 cents and 3 cents
September 2020	Final and special	5 cents and 3 cents
March 2020	Interim and special	5 cents and 3 cents
September 2019	Final and special	5 cents and 3 cents
March 2019	Interim and special	5 cents and 3 cents
September 2018	Final and special	7.5 cents and 3.5 cents
March 2018	Interim and special	7.5 cents and 3.5 cents
September 2017	Final	15.5 cents
March 2017	Interim	15.5 cents
September 2016	Final	15.5 cents
April 2016	Interim	15.5 cents
September 2015	Final	15.5 cents
March 2015	Interim	15 cents
September 2014	Final	15 cents
March 2014	Interim	14.5 cents
September 2013	Final	14 cents
March 2013	Interim	14 cents
Total:		$2.365

An investor who bought into Telstra shares 10 years ago likely would have received $2.365 in dividends for each security they held.

Thus, our 233 parcel of Telstra shares would have provided around $551.05 of passive income during that time.

That certainly offset the ASX 200 stock’s tumble. Combining its dividends and its share price’s fall leaves the telco giant returning 49% over the last 10 years.

It’s also likely that could have been compounded with the use of a dividend reinvestment plan (DRP).

Additionally, all Telstra’s dividends since the year 2000 have been fully franked. That means they might have provided extra benefits come tax time.

Telstra shares currently trade with a 3.35% dividend yield.

The post Bought $1,000 of Telstra shares 10 years ago? Here’s how much dividend income you’ve received appeared first on The Motley Fool Australia.

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More reading

• How much do I need to invest in ASX dividend shares for a retirement income of $5,000 per month?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• How I’d try to make $1 million by investing $5 a day in ASX 200 shares

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There aren’t that many ASX dividend shares that pay large dividends and could keep growing in the long term.

I really like looking at ASX resource shares for potential income because of how low their price-to-earnings (p/e) ratios normally are. However, I’d only want to go for particular ASX resource shares when the commodity price is low. And there’s certainly no guarantee that the dividend wouldn’t halve in the following year.

But, while there may be some uncertainty in the market at the moment, the following ASX dividend shares are expected to pay big dividends in FY23 and beyond. I’d happily invest $5,000 in each of the following businesses for dividend income.

Shaver Shop Group Ltd (ASX: SSG)

This business is a growing retailer of grooming and other high-performance beauty products.

Let’s look at the expected dividend yield. Broker Ord Minnett suggests that Shaver Shop could pay a grossed-up dividend yield of 14% in FY23 and 14.6% in FY24.

Retailers typically trade on low multiples of their earnings, meaning the dividend yield can be pretty high.

Shaver Shop says that the Australia and New Zealand beauty market could grow from around $10 billion to approximately $12 billion by 2026. This could be a useful tailwind for earnings over the next few years.

Charter Hall Long WALE REIT (ASX: CLW)

This real estate investment trust (REIT) owns a diversified portfolio of properties. They are all signed onto long-term leases, providing good visibility for rental income and profitability.

It has tenants like Endeavour Group Ltd (ASX: EDV), Australian government entities, Telstra Group Ltd (ASX: TLS), BP (LON: BP), Inghams Group Ltd (ASX: ING) and Coles Group Ltd (ASX: COL).

The business is expecting to pay a distribution per unit of 28 cents per share in FY23. This translates into a forward distribution yield of 6.2%.

Aside from the changes in interest rates, I think this is a fairly defensive ASX dividend share option.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as a business that partners with “the best asset managers across the world who bring differentiated market perspectives and investment approaches” and builds an economic partnership with them.

Some of the names in the portfolio include GQG Partners Inc (ASX: GQG), Victory Park Capital, Carlisle Management, Astarte Capital Partners, and Banner Oak.

A rebound of investment markets could be a very useful tailwind for the underlying funds under management (FUM), earnings and the dividend. Despite all the volatility, aggregate FUM grew 1.1% in the three months to September 2022. Excluding GQG, aggregate FUM grew in the quarter by 3.4% for US-dollar-denominated fund managers and 7% for the Aussie-dollar-denominated fund manager.

Ord Minnett is expecting the ASX dividend share to pay a grossed-up dividend yield of 7.4% in FY23 and 8.25% in FY24.

Nick Scali Limited (ASX: NCK)

Nick Scali is one of the largest retailers of furniture across Australia and New Zealand. While that may not be the most defensive industry, people are still buying large volumes. Indeed, a recent trading update showed year-over-year growth.

While the ASX dividend share may not see a lot of growth in the next 12 months, the company is planning to open more stores, grow its highly profitable online sales and benefit from scale advantages (particularly with the Plush acquisition).

According to the broker Citi, Nick Scali could pay a grossed-up dividend yield of 11.6% in FY23 and 9.5% in FY24.

Foolish takeaway

These four businesses have an average dividend yield of 9.8% for FY23. So, with $20,000. That would create annual dividend income of $1,960.

I think Shaver Shop and Pacific Current could be two of the underrated ASX dividend shares at the moment.

The post Which ASX shares I’d buy with $20,000 right now to target an 8% dividend yield appeared first on The Motley Fool Australia.

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• Naughty or nice? Buy 3 ASX shares heading in opposite directions, says fund
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• My top wildly undervalued ASX dividend king to buy in 2023
• Here’s how I’d invest $5,000 in ASX dividend shares to earn a second income
• Top ASX shares to buy in December 2022

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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All Ordinaries Index (ASX: XAO) shares have struggled this year.

Battered by soaring inflation, fast-rising interest rates, and the global consequences of Russia’s invasion of Ukraine, the All Ords is down 6.8% in 2022.

But 2023 may bring a big turnaround for ASX shares and stock markets the world over.

That’s according to the consensus views of 134 fund managers, responding to a Bloomberg News survey.

Why could ASX shares enjoy a much stronger 2023?

Bloomberg’s survey included some of the biggest names in the investment world, like BlackRock and Goldman Sachs.

Conducted earlier this month, the survey revealed that some of the top investors are forecasting “low double-digit gain” in 2023. Overall, a 10% gain is predicted for global stocks next year, which could see ASX shares potentially join or exceed that rally.

Many of the fund managers were optimistic that we’ve seen peak inflation, indicating a more dovish US Fed in 2023. All told 71% of the surveyed fundies said they expect share markets to gain next year with 19% expecting them to fall.

Bloomberg noted that in a similar survey last year, the fundies accurately forecast that the biggest risk for share markets in 2022, as witnessed with ASX shares this year, was aggressive interest rate hikes by central banks.

The fundies broadly had a preference for stocks that could maintain their earnings, even in the event of a recession. They also expect stock markets to perform better in the second half of 2023 than in the first half.

The biggest threat in 2023 for global stock markets and ASX shares was said to be “stubbornly high inflation”, cited by 48% of respondents.

The big opportunities next year come from a potential ceasefire in Ukraine and with China’s reopening.

According to Fabiana Fedeli, chief investment officer at M&G:

The outlook from here onward will be influenced by the probability, depth and longevity of recession. There are still pockets of opportunity where companies with strong fundamentals that are able to weather the storm get sold off in times of market panic.

Pia Haak, chief investment officer at Swedbank Robur, pointed out that much of the recession fears have already been priced into the market.

“Even though we might face a recession and falling profits, we have already discounted part of it in 2022,” Haak said. “We will have better visibility coming into 2023 and this will hopefully help markets.”

The post Holding off buying ASX shares? Here’s why you could wind up with major FOMO appeared first on The Motley Fool Australia.

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• How much do I need to invest in ASX dividend shares for a retirement income of $5,000 per month?
• 5 things to watch on the ASX 200 on Wednesday
• Is the iShares S&P 500 ETF (IVV) a buy following its stock split?
• Investing in ASX 200 shares could turn your $10,000 into $100,000. Here’s how
• Why did the BHP share price get hammered on Tuesday?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When the time comes to retire, you’ll hopefully have a bountiful superannuation balance to support your dream lifestyle.

But what if you don’t want to settle for that? What if you could have a $5,000 monthly paycheck all through retirement on top of your super without needing to work for it?

I know I’d be happy with that! But is it achievable?

The good news is that it certainly is possible if you have both time and patience.

How to retire with a $5,000 paycheck?

A monthly passive income of $5,000 equates to $60,000 annually. So, in order to generate this level of income we will need to bring in the latter in dividends each year to fund our lifestyle.

The S&P/ASX 200 Index (ASX: XJO) traditionally provides investors with an annual dividend yield of approximately 4.5%.

If this proves to be the case in the future, we’re going to need to build an investment portfolio worth $1.3 million that is filled with dividend-paying ASX 200 shares like Macquarie Group Ltd (ASX: MQG) and Telstra Group Ltd (ASX: TLS).

Building your portfolio

According to Fidelity, over the last 30 years, the Australian share market has generated an average annual return of 9.6% per annum.

While past performance is not a guarantee of future performance, these returns are in line with long term returns generated across the world. So, I would be disappointed if the next 30 years didn’t deliver something similar.

In order to grow your portfolio to $1.3 million from zero, investors could put $650 of their earnings into the market each month for a period of 30 years. If these investments earned the average annual return of 9.6% per annum over this period, they would grow to $1.3 million after three decades.

Once the portfolio reaches that level, you would be earning $60,000 a year ($5,000 a month) from dividends if you’re commanding a dividend yield of 4.5%.

Different time horizons

If you don’t have as long as that to build your portfolio, don’t worry. It’s still possible, you’ll just need to dig deeper into your pockets. For example, if you’re able to invest $1,850 per month, then you could get there in 20 years by generating that 9.6% per annum average annual return.

Conversely, if you have even more time on your side, then the periodic investment required to achieve this goal would be even smaller.

Thanks to the power of compounding, a $260 per month investment over a 40-year period would grow to be worth $1.3 million if it earns the aforementioned annual return. And a 50-year investment period would require only a $100 investment.

I feel the latter really demonstrates why starting as early as possible is the best way to generate wealth from the share market.

The post How much do I need to invest in ASX dividend shares for a retirement income of $5,000 per month? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• The Macquarie dividend is being divvied out today. Here’s the lowdown
• Morgans names 2 of the best ASX 200 dividend shares to buy in December
• Here are the top 10 ASX 200 shares today
• Telstra share price outperforming despite data breach impacting 132,000 customers

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and pushed higher. The benchmark index rose 0.3% to 7,203.3 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to push higher on Wednesday following a positive but volatile night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 14 points or 0.2% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.3%, the S&P 500 is up 0.7%, and the Nasdaq is up 1%. The latter was up almost 4% at one stage after a better than expected US inflation report.

Oil prices surge

It could be a good day for energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices rose strongly overnight. According to Bloomberg, the WTI crude oil price is up 3.1% to US$75.44 a barrel and the Brent crude oil price has risen 3.6% to US$79.14 a barrel. Oil prices jumped after US inflation came in lower than expected.

Annual general meetings

There are a number of annual general meetings being held on Wednesday. Among the ASX 200 shares holding meetings are Australia’s oldest bank Westpac Banking Corp (ASX: WBC), fund manager Magellan Financial Group Ltd (ASX: MFG), and commercial explosives company Orica Ltd (ASX: ORI).

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price stormed higher overnight. According to CNBC, the spot gold price is up 1.7% to US$1,822.3 an ounce. Once again, the lower than expected US inflation reading boosted the precious metal.

Woolworths remains a buy

The Woolworths Group Ltd (ASX: WOW) share price remains good value according to analysts at Goldman Sachs. In response to reports that the retail giant has sold almost a third of its Endeavour Group Ltd (ASX: EDV) holding, the broker has retained its buy rating and $41.70 price target. Goldman suspects that the funds will be used to acquire a 50% stake in PETstock for ~A$600 million. It feels this “would be in line with its eco-system growth strategy.”

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• How I’d try to make $1 million by investing $5 a day in ASX 200 shares
• Woodside share price holds steady despite oil giant’s warning over gas intervention
• Tyro share price rebounds 14% as rumours swirl over next moves

Motley Fool contributor James Mickleboro has positions in Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Leading exchange-traded fund (ETF) iShares S&P 500 ETF (ASX: IVV) recently went through a stock split.

Blackrock decided to do a stock split with the iShares S&P 500 ETF – it’s a 15:1 stock split, which is why the unit price has gone from close to $600 to around $40.

The ETF returned to normal trading on a normal settlement basis this week.

I think it’s important to remember that a stock split doesn’t mean investors have more or less invested in the ETF. A $1,200 investment is still worth $1,200 whether it was spread across two units or 30. The pizza has been divided into many more slices, but it’s still the same amount of pizza.

Is the iShares S&P 500 ETF a buy?

Warren Buffett himself has said that (American) investors can do well by just investing in an S&P 500 fund.

I think it’s attractive for a number of different reasons.

For starters, the fund has an extremely low annual management fee of just 0.04%. This means investors can get exposure to the portfolio for almost nothing.

I think it’s a great portfolio. Everyone may have their own thoughts on the US economy, but many of the businesses listed in the US are global powers in their respective industries.

Apple sells its smartphones all over the world. Microsoft’s office software and Xbox consoles have a worldwide user base. Amazon‘s e-commerce is growing, along with its cloud computing service AWS. Alphabet’s Youtube, Google Search and more are used by people worldwide.

There are many other worldwide businesses in the portfolio such as Berkshire Hathaway, Tesla, Johnson & Johnson and Exxon Mobil.

The ETF has produced solid returns over the past three years, despite a large amount of volatility that investors have suffered from because of high inflation and rising interest rates.

In the five years to November 2022, the iShares S&P 500 ETF had returned an average of 13.5% per annum. While past performance is not a reliable indicator of future performance, I think it shows the types of returns that the underlying businesses are capable of producing over time.

Foolish takeaway

While the future is uncertain – there’s always uncertainty – I think that the iShares S&P 500 ETF is a leading idea to consider for investors that want to invest in ETFs focused on international shares. The stock split doesn’t really mean anything in terms of how attractive the investment is, but I think it’s compelling as a passive investment option.

The post Is the iShares S&P 500 ETF (IVV) a buy following its stock split? appeared first on The Motley Fool Australia.

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More reading

• Is the iShares S&P 500 ETF (IVV) really down 95% today?
• What you need to know about next week’s iShares S&P 500 ETF (IVV) stock split
• 2 ASX ETFs I’d buy right now if I were in my 20s
• 2 high quality ETFs for ASX investors to buy now

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, and iShares S&p 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Would you like to trade in $10,000 and receive $100,000 in return? It’s a moot question, but can it really be done with ASX 200 shares?

Well, the question shouldn’t be ‘can’. It should be ‘how long will it take?’

Shares are growth assets. Sure, they are volatile, but there has never been a period in the history of the ASX (which has roots that predate Federation, mind you) when the Australian share market has never failed to eclipse a previous all-time high.

Shares go up over time; they always have. That doesn’t mean there won’t be a few wobbles or crashes along the way. But markets rise far further and more often than they fall.

So how long would an investor have to wait for $10,000 to become $100,000?

Turn $10,000 into $100,000 with ASX 200 shares

Well, it depends on a few things. First, the rate of return. Some ASX shares will give better returns than others of course. So for this exercise, we’ll use an index exchange-traded fund (ETF) that covers the entire market. That way, we can get an average return for ASX 200 shares.

The oldest ASX 200 ETF on the share market is the SPDR S&P/ASX 200 Fund (ASX: STW), so what better candidate to use? Since its inception in 2001, the SPDR ASX 200 ETF has returned an average of 7.94% per annum, assuming dividends are reinvested. See its share price history below:

So if an investor put $10,000 into shares generating a 7.94% annual return, it would take approximately 29.5 years for that $10,000 to grow 10 times to $100,000.

ETFs are usually ‘maintenance-free’, bottom drawer types of investments, so the only thing this investment requires is time. But near-30 years is a long time to wait.

So what if our investor added an extra $100 per month?

Why then it would only take 19.5 years to reach our $100,000. After 30 years, our lucky investor would have more than $250,000 to their name.

If we upped our monthly contributions to $200 a month, we would cut our time to hit $100k down to 15 years. $500 a month would reduce it again to just under 10 years.

Such is the power of compound interest.

The post Investing in ASX 200 shares could turn your $10,000 into $100,000. Here’s how appeared first on The Motley Fool Australia.

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More reading

• Is the SPDR S&P/ASX 200 Fund (STW) an ETF?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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